Students would get tax-free Pell Grants and bigger education tax credits.
This bill would make Federal Pell Grants completely tax-free for students, no matter how they use the money. It would also let taxpayers claim more expenses, like computers and child care, when applying for education tax credits, starting in 2025.
Today, Federal Pell Grants are only tax-free if used for tuition and certain fees, and they can reduce the amount of expenses you can claim for education tax credits. Also, education tax credits generally only cover tuition and fees. If this bill passes, all Federal Pell Grant money would be tax-free, and you could claim more expenses like computers (up to $1,000), child care, and course materials for education tax credits, without Pell Grants reducing those amounts. These changes would start with tax years beginning after December 31, 2024.
HR 2543 · 119th Congress · April 1, 2025 · AI Summary by gemini-2.5-flash · 10/10
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Amounts reflect total quarterly lobbying spend reported to the Senate, not bill-specific spending. Source: Senate LDA filings.